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OPPD, Facebook collaboration opens opportunities for public power: Burke

The Omaha Public Power District's collaboration with Facebook, which resulted in the social media giant deciding to build a new data center in Nebraska, offers an example of how Facebook can work with public power to create economic development and value throughout the country, said OPPD President and CEO Tim Burke.

"What Facebook has said is that typically they never really thought about public power as a solution because they didn't think" public power would be "agile or creative enough," Burke said at the American Public Power Association's national conference in Orlando, Fla., on June 20.

OPPD has helped to "knock down that barrier with them about how they can really engage public power to create economic development and value throughout the United States," Burke said.

The OPPD president and CEO made his remarks as part of a panel at the conference, "Partnerships for a Sustainable Future," which also included officials from Walmart Stores Inc., First Solar and Denton Municipal Electric.

OPPD in early April detailed how it played a key role in helping to bring a new Facebook data center to Papillion, Neb.

The district's rate plan, Rate 261M, "is a unique and powerful example of how OPPD works to meet the needs of large companies, particularly those who seek more renewable energy, while bringing broader economic benefits to all of its 369,500 customer-owners," OPPD said in an April 4 news release.

Rate 261M gives customers flexibility in how they meet their energy goals, while charging fair and reasonable rates that cover OPPD's fixed costs, including generation and system capacity, transmission and administration.

Rate 261M, an extension of OPPD's Rate 261 for large-power, high voltage-transmission-level customers, was approved by OPPD's board in January 2017.

"OPPD was a major driver in this project with Facebook," Burke said at the Association's national conference where he described OPPD's "journey" to Rate 261M.

"It's one of the largest projects that has ever landed in Nebraska," he said, adding, "it will be one of our new top 25 customers."

In providing an overview of the Facebook project, Burke also noted that OPPD put together a rapid electrical infrastructure development approach.

"What we have done with the local economic development organizations is build a site development team that has eight sites at all times ready to go," he noted.

"When we didn't get Google the first time and when we didn't get Facebook the first time it was really because of sites not being available," Burke noted.

"So the utility really took it upon itself" to fund some of this initiative, "but also work very closely in creating the certification process around how we might do that and we still drive that process today."

Qualification for Rate 261M

To qualify for the rate, a customer must be large enough to meet certain criteria, such as requiring a minimum of 20 megawatts of demand for 161-kilovolt service and 200 MW of demand for 345-kV service. A ramp-up period of 18 months would be allowed before that minimum usage requirement kicks in.

OPPD will be a fully integrated service partner, managing the process and providing service.

With respect to what customers get in return, in Facebook's case, it will be able to work with OPPD to procure 100 percent renewable energy for their new data center in Sarpy County.

Burke expects "sequels"

"I call this a story and a journey because we've done it at this high level - high-level transmission, high-level load - but I believe the sequels will be for us to cascade this down to different levels of our customer load because not all of our customers are 20 megawatts," he said.

"I think you'll see that journey and those sequels occur over a period of time."

Walmart, First Solar: communicate with customers

Steve Chriss, director of energy and strategy analysis at Walmart, noted that in 2005 the company set an aspirational goal to be powered 100 percent by renewable energy.

"We've set several timeframe goals since then, and our latest timeframe goal, which was set last November is to be supplied 50 percent by renewable energy by 2025," Chriss said.

In addition, through a combination of energy efficiency and renewable energy, Walmart has a goal to reduce emissions in its operations by 18 percent.

Walmart has deployed or contracted for renewable energy in 18 states "and counting. We do have a lot in the hopper," Chriss said. "In terms of what we have installed so far, we have over 365 installed solar units, 60 fuel cells," as well as a one-megawatt wind turbine onsite at a distribution center in California.

In addition, Walmart has executed several off-site, large energy contracts. Chriss noted that Walmart has large wind contracts in the Electric Reliability Council of Texas.

With respect to on-site generation, the Walmart executive said that "we are not big net metering customers in terms of the financial part of it. In many places, you have to be a net metering customer just to interconnect, but the compensation from net metering doesn't drive what we're doing because for the most part we can't build a system big enough on our store in order to net out on a monthly basis."

Chriss said that what Walmart looks for when it comes to renewable energy transactions "is not what some other C&I [commercial and industrial] customers are looking for out of these deals." Why? "Because some don't have roof space. Some don't have procurement groups. Some don't have the sophistication that we are lucky enough to have."

Therefore, "it's important to communicate with your customers to find out what they're looking for, what their tolerances are and I think that helps kind of deliver good end products," Chriss remarked.

"When I look at public power utilities, there's a lot about maintaining existing load, keeping your customers happy, but also attracting new load," he said.

With the deployment of energy efficiency, "I'd imagine that public power is similar to the IOUs [investor-owned utilities]," where loads are fairly flat.

"So what can you do to bring new customers to town, new jobs to town and drive those benefits for everybody? There's a benefit in terms of diversification of the generation portfolio, looking to reduce fuel risk and then, ultimately, I'm sure all of you want to do things that benefit all your customers," the Walmart official said.

That is an "important part of it and really is something that should play into the consideration of any sort of program or deal that we would look at with a public power utility."

Karl Brutsaert, director of global C&I origination at Arizona-based First Solar, noted that with the significant drop in price for solar energy and wind power "and becoming affordable and competitive with conventional energy, what we're seeing is a lot of corporates taking a hard look at renewable energy as a low cost, viable option."

Historically, corporations didn't have the opportunity to obtain long-term, fixed-price contracts for renewable energy, but now that renewables are more affordable, companies are now able to do that, Brutsaert noted.

"So what we're seeing is just this groundswell of momentum among corporates to go green," he continued.

Citing information from the Rocky Mountain Institute, the First Solar official said that a majority of Fortune 100 companies have some form of sustainability target "and typically renewable energy rolls into that." In addition, the number of corporations setting 100% renewable energy targets is growing, he pointed out.

The renewable energy groundswell is an opportunity for utilities to allow customers to "get access to renewable energy and thereby attract them to their service territories."

As corporations set 100% renewable energy targets, that in turn means that "giving them access to renewable energy can attract new load, new jobs and broader economic development."

Echoing what Chriss said, Brutsaert noted that when First Solar communicates with corporations, "each one has their own needs and requirements and what they're looking for." There is a need "to talk with your customers and understand exactly what they're looking for."

At the same time, First Solar has seen some patterns emerge in terms of what works and what doesn't.

While renewable energy sometimes is viewed as a threat, at least initially, "what I'm here to tell is that it can actually be a big opportunity given a lot of these corporates have these targets and want your help in meeting them," Brutsaert told the audience of public power utility officials.

"But the deals have to be structured in a smart way," he said. For example, "how do you do the project in a way that other ratepayers in the service territory are kept whole? It can definitely be done, it has been done. It doesn't have to negatively impact other ratepayers, so there's definitely a path to doing that," he said.

Denton Municipal Electric official details push for renewables

Jessica Rogers, energy services manager at Denton Municipal Electric in Texas, focused her remarks on the public power town's plan to dramatically expand its renewable energy supply portfolio, which Denton Municipal Electric refers to as the "Renewable Denton Plan."

Rogers said that in terms of partnerships "and how we see ourselves and our corporate partners in Denton," the Renewable Denton Plan is a "major, major selling point."

Rogers noted that there are Fortune 500 corporations in Denton that have set sustainability goals.

"It's really fun to get to walk in their office and tell them every time that they turn on that manufacturing line and every time they turn on a light switch in their office," they are going to have a significant chunk of their power supplies come from renewable energy.

But what if a corporation wants to do more in terms of renewable energy development? "We're developing those conversations and helping these different groups achieve their goals," Rogers said.

"It's really a wonderful, symbiotic thing that's happening" where both corporations and utilities "are able to come together and say, we want to look to the future, we want to encourage this development and how can we find a way that's beneficial to both the customers in general and to our specific corporate customers," Rogers said.

She disclosed at the conference that Denton Municipal Electric in June bumped up its target of having 88% of its power supplies come from renewable energy by 2019, an increase from the prior 70% by 2019.

A 225-megawatt natural gas fired power plant is a key component of the Renewable Denton Plan. Denton Municipal Electric is funding construction of the plant through the issuance of revenue bonds, Rogers noted in a recent interview with the Association.